The Federal Government recently issued new guidance to employer health plans relating to COVID-19. Employers are encouraged to review the full set of FAQs which can be found here: FAQs-Part-50 (hhs.gov), but here are the key take-aways:
- Group health plans and health insurance issuers must cover, without cost-sharing requirements, any qualifying COVID-19 preventative service pursuant to law, including COVID-19 vaccines (and boosters) immediately once the particular vaccine is authorized.
- Group health plans and issuers can provide incentives, including premium discounts, to encourage individuals to receive COVID-19 vaccines. However, employers should be aware that premium discounts must comply with wellness regulations. In particular:
- The premium discount program must provide a reasonable alternative standard to qualify for the discount for individuals where it is unreasonably difficult due to a medical condition or medically inadvisable to obtain a COVID-19 vaccine. The FAQs provide that the plan may offer such individuals “a waiver or the right to attest to following other COVID-19-related guidelines” in order to qualify for the discount.
- The plan must provide notice of the availability of the reasonable alternative standard under the premium discount program.
- The discount cannot exceed 30 percent of the total cost of employee-only coverage and must give individuals eligible for the program the opportunity to qualify for the reward under the program at least once per year.
- Group health plans and insurers may not condition eligibility for benefits or coverage for otherwise covered items or services to treat COVID-19. Benefits under the plan must be uniformly available to all similarly situated individuals and, therefore, plans and issuers may not discriminate ineligibility for benefits or coverage based on whether or not an individual obtains a COVID-19 vaccination.
- For purposes of determining whether a plan is considered “affordable” under the Affordable Care Act, COVID-19 vaccine premium discounts are not included. However, premium surcharges are included. The FAQs give this as an example: “if the individual premium contribution under a COVID-19 vaccination wellness program was reduced by 25 percent, this reduction is disregarded for purposes of determining whether the offer of that coverage is affordable for purposes of assessing liability for the employer shared responsibility payment. Conversely, if an individual’s premium contribution for health coverage under a COVID-19 vaccination wellness program is increased by a 25 percent surcharge for a non-vaccinated individual, that surcharge would not be disregarded in assessing affordability.”
What can employers do now? Given this guidance, employers can explore issuing premium discounts for employees who are vaccinated as a means to incentivize COVID-19 vaccinations.